Nokia Trims Fourth-Quarter Guidance - TheStreet

Updated from 7:18 a.m.


(NOK) - Get Report

slipped 4% Thursday morning after it offered up a mixed earnings report.

The company posted solid third-quarter numbers but trimmed fourth-quarter guidance, warning that cell-phone sales will continue to be flat amid strong competition and a weakening dollar.

For its third quarter ended last month, the Helsinki-based wireless giant posted earnings of 823 million euros ($958.5 million), or 17 euro cents a share, up from the year-ago 610 million euros, or 13 cents a share. Revenue slipped 5% to 6.87 billion euros. On a pro forma basis, excluding certain costs, earnings were flat at 18 euro cents a share. The numbers were in line with Wall Street estimates.

But the company said the fourth quarter would be a different story, as sales will continue to slide and the weakness of the dollar will hurt earnings. Nokia forecast fourth-quarter earnings of around 21 euro cents a share, which is roughly equivalent to 25 cents on the U.S. dollar and leaves the company at the low end of the 26-cent Wall Street estimate.

Nokia emphasized that it continues to win market share with its cell phones, saying its global market share was 39% in the third quarter. The company also said it expects the market at large to continue growing strongly, putting its industrywide 2003 cell-phone sales forecast at 460 million.

But investors continue to watch Nokia's margins closely as competition accelerates in the handset business heading into the holiday season. The company said its reported margin for the latest quarter was 22%.

The latest quarter saw networks sales drop. The company said it continues to expect the overall network infrastructure market to decline by 15% or more for the full year 2003.

Nokia shares dropped 76 cents Thursday to $16.47.